Microsoft's ambitions are anything but small. The world's #1 software company provides a variety of products and services, including its Windows operating systems and Office Suite software. The company has expanded into markets such as video game consoles, interactive television, and Internet access. With its core markets maturing, Microsoft is targeting services for growth, looking to transform its software applications into Web-based services for enterprises and consumers. Microsoft has reached a tentative settlement to end an ongoing antitrust investigation, agreeing to uniformly license its operating systems and allow manufacturers to include com

Microsoft Lawsuit Pits Johnnie Cochran vs. Bill Gates: Two of the most influential teams of attorneys practicing in the civil rights arena have joined their suits against Microsoft Corp. alleging a pattern of racial and sexual discrimination against African-Americans and female employees. Hundreds more may join the suit (Durham-Vichr, 2001).

Microsoft was very conservative in reporting its earnings. It was argued that Microsoft was using conservative measures to build up a “rainy day fund” for times of future losses. Due to a wrongful dismissal suit filed by Charles Pancerzewski, former head of internal auditing, the SEC began an investigation at Microsoft. Pancerzewski claimed that he was wrongfully terminated. His reasoning was that for over the past five years he had been given stellar evaluation marks and that after telling his supervisor that Microsoft might be breaking SEC and tax laws, he received his first unsatisfactory evaluation and was forced to resign. After several court hearings, US District Judge Carolyn Dimmick denied Microsoft’s plea for summary judgment. In finding credible evidence of Microsoft’s misconduct, the SEC began an investigation (Romano, 1999).

Neither of these lawsuits, in their original form, were successful for the plaintiffs. However, the threat of an employment discrimination litigation haunts most businesses, no matter how well intentioned their fair-employment practice efforts are. How well intentioned was Microsoft? Company spokesperson, Dean Katz, stated in the strongest terms that, “Microsoft does not tolerate discrimination in any of its employment practices,” and “We are committed to treating all of our employees fairly. We take these kinds of issues very seriously” (Microsoft sued, 2001). Katz went on to explain that African Americans made up 2.7 percent of Microsoft’s domestic workforce and that all minorities comprised 22.7 percent of the company’s workers. These numbers were significant, he said, since the company’s 1997 percentage of minorities was closer to 16 (Gebler, 2001). From the perspective of Jackson’s lawyer, however, the 2.7 percent of African Americans in the workforce coupled with the fact that only 1.6 percent of the company’s 5,155 managers were African-American “demonstrates to the world that Microsoft is not interested in hiring or promoting blacks” (Wilcox, 2001).

The software industry is a natural monopoly because average total costs continually decline with increased output. Therefore, if Microsoft could find a way to eliminate competition without having to compete on price, then profits could increase dramatically as Microsoft could sell more units (Spaulding 2000).

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